San Francisco Makes Bold Move Towards Renewable Energy

Friday, September 21, 2012, by Collier Johnson II

This week, San Francisco, California made a bold step to a renewable energy future. This Tuesday, the San Francisco Board of Supervisors, voted 8-3 to provide a renewable energy option to a majority of San Francisco residents. Ironically, the plan will involve a major contract with a company not necessarily known for renewable energy, the Shell Oil Company. Under the plan, the Shell Oil Company will buy energy generated from wind and solar sources out of state, and sell it to San Franciscans. The goal of the program is to provide an option to residents to buy energy generated from 100% renewable sources.

The plan will not be cheap. Sources indicate that residents will see an average increase in their monthly utility bills of around $20 with some residents seeing increases as much as $77. But for those residents who want to end their reliance on non-renewable energy sources like oil, the increase will be well worth the extra cash. Unfortunately for those residents who do not want to spend the extra money, the city does not give them much of a choice, at least initially. The program will enroll about half of the city’s population into the renewable energy program automatically. Analysts argue that the automatic enrollment is necessary because the city needs about 90,000 customers to make the program work. There is an option for people who do not want to participate. Residents automatically enrolled in the program will have 5 months to leave at no charge. After that, it will cost $5 to leave. At least some people are not happy with the automatic enrollment part of the program. “It smells of coercion,” said Mark Farrell, one of the three members of the board of supervisors who voted against the plan.

Residents will see an average increase in their monthly utility bills

Although the vote earlier this week by the Board of Directors is a victory for proponents of the program, it is still just a first step. The plan has to go to the city’s board for a vote and it is currently met with opposition by the city’s Mayor, Ed Lee. In addition, the program is opposed by the Pacific Gas and Electric Company, who currently provides utilities for the city of San Francisco and will see their market share decline as a result of this plan. Furthermore, the city is exposed to legal risks. Under California law, individuals are allowed to protest government contracts leaving the contract between the city and Shell Oil open to legal implications. But perhaps the biggest challenge of all will come from the residents of San Francisco. Because the plan includes an option for residents who do not want to participate to opt out of the program, if too many residents opt out, the program will not work. Given that we are still in a very deep recession, are the residents of San Francisco willing to pay more for clean energy?